Small business owners in California know that general liability insurance is a necessity. Although California does not require general liability insurance for most small businesses (it is required for contractors), unless you can afford to pay lawsuits out of pocket, you’ll want general liability insurance.
- Top 7 Providers of General Liability Insurance in California
- What is General Liability Insurance?
- What doesn’t General Liability Insurance Cover?
- Why Small Businesses Should Get General Liability Insurance in California
- How Much does General Liability Insurance Cost in California?
- What Affects How Much I’ll pay for General Liability Insurance?
- How to find cheap general liability insurance in California?
- General liability insurance for contractors in California
- General liability insurance for LLCs in California
- Small business insurance in California
Top 7 Providers of General Liability Insurance in California
We researched more than 10 insurance companies focused on general liability insurance for small businesses in California. Here are the top 6 that we recommend:
- CoverWallet: Best for Comparing Online Quotes
- Nationwide: Best Customer Satisfaction
- The Hartford: Best for Industry-Specific Packages
- Hiscox: Best for Discount for Home-based Business and Multiple Policies
- Progressive: Best to Combine with Commercial Auto Insurance Policy to Get 15% Discount
- Thimble Insurance: Best for Part-Time or Seasonal Businesses
- Next Insurance: Best for Self-Employed Business Owners
CoverWallet: Best for Comparing Online Quotes
CoverWallet is a digital broker that works with many leading business insurance companies such as Liberty Mutual, Hiscox, Nationwide, etc. They are able to provide you with the quotes of these several partner companies so that you can compare in one place conveniently. After providing your and your business’s information, you will be able to compare several quotes within minutes. If you want to compare online quotes, working with CoverWallet is a good option.
After you decide to buy a general liability insurance policy through CoverWallet, you will be able to use their great digital experience with many great features to manage your policy. As a small business owner, you probably have many insurance policies such as workers compensation, general liability, professional liability, cyber security, etc. CoverWallet help you compare quotes and buy policies from the best providers. Even if you buy different insurance policies from different providers, you will be able to manage all business insurance policies on one CoverWallet dashboard. This will save you a lot of time and efforts.
Below is a sample of general liability insurance quotes that we got from CoverWallet:
Nationwide: Best Customer Satisfaction
Nationwide got the highest score possible on J.D. Power’s Commercial Insurance Study for 2019. Out of 1,000 points, they earned 868, higher than any other company. They received high ratings from the more than half a million business owners they insure. They offer a wide range of other types of business insurance, so you can get all your insurance from Nationwide. Policies are customizable and you can get a quote and pay your bill online. Learn more about Nationwide Small Business Insurance Review
The Hartford: Best for Industry-Specific Packages
The Hartford has over 200 years of experience in small business insurance and have insured more than a million small business owners. The have excellent customer service reviews and they have online quoting to help you get insurance quickly so you can move on to other aspects of your business. They also offer industry-specific packages and have a lot of coverage options to choose from. Learn more about the Hartford Small Business Insurance Review
Hiscox: Best for Discount for Home-based Business and Multiple Policies
You own a small business, but you don’t have hundreds of employees. In that case, consider Hiscox, which specializes in businesses with less than five employees. They offer discounts if yours is a home-based business or if you buy multiple policies. They have an easy online application process, and you can pay monthly. Learn more about Hiscox Small Business Insurance Review
Progressive: Best to Combine with Commercial Auto Insurance Policy to Get 15% Discount
Progressive allows you to tailor your coverage so that you can afford your payments. Also, since California requires commercial auto insurance, if you need that, too, you’ll get a 15% discount. They also have an easy online application process, and you can pay your bill and manage your policy online.
Thimble Insurance: Best for Part-Time or Seasonal Businesses
If you have a part-time or seasonal business, Thimble may be the way to go. It allows you to buy policies for an hour, a day, a week or a month so you only need to pay for insurance when you need it. They also have commercial auto insurance and professional liability insurance. Getting a quote is really easy, you just put in your zip code and what your business does, answer a few questions and you can be covered the same day. For a photographer in California, we got this quote:
>>NEXT: GET A QUOTE at THIMBLE
Next Insurance: Best for Self-Employed Business Owners
Next insurance specializes in small business insurance, including general liability. They particularly focus on the self-employed. You can get coverage in ten minutes and the online quote system is a breeze. If you don’t like online quoting, you can talk to one of their agents instead. This quote is for a photographer. Our profession and the state we live in were the only questions they asked.
What is General Liability Insurance?
General liability insurance is sometimes known as business liability insurance. This type of insurance covers you from claims involving:
- Property damage
- Bodily injury
- Product liability
- Slander
- Copyright infringement
General liability insurance will cover the costs of the lawsuit and any medical expenses incurred by the person who sues you. Learn more about what general liability insurance covers.
In addition, general liability insurance can be required in certain circumstances in California, like:
- You’re a contractor (any type of contractor except handyman). Learn more about general liability insurance for contractors:
- You rent space in a commercial building (the renter may require you to have general liability insurance)
- Clients sometimes require it, or at least like to see that you have it
- You have a mortgage
California does require workers compensation insurance, even if you have only one employee, and commercial auto insurance.
What doesn’t General Liability Insurance Cover?
General liability insurance doesn’t cover:
- Employee injuries – This is covered by workers comp insurance. Learn more at the best workers comp insurance in California.
- Auto accidents – You’ll need commercial auto insurance to protect you from auto accidents. Learn more at the best commercial auto insurance in California.
- Punitive damages
- Professional mistakes – Professional liability insurance covers you from mistakes and errors you make in your job. Learn more at the best professional liability insurance in California.
- Intentional acts
Why Small Businesses Should Get General Liability Insurance in California
Even though it’s not technically required, there are a lot of good reasons why small businesses should get general liability insurance in California. Small businesses (defined as having less than 500 employees) make up 98% of the businesses in California and employs almost half of the workforce. In addition to having some of the toughest anti-discrimination laws and fair employment practices, there are some quirks in California that you’ll want to be familiar with if you own a business here.
- California is fifth in the nation for states where small business owners face the highest risk of being sued by their employees.
- California has over 3.9 million small businesses (small defined as fewer than 500 employees)
- California does not have caps on liability lawsuits, making general liability insurance extremely important
- State courts in California have a reputation for awarding large liability settlements
In addition, anyone injured by a business in California has up to two years to file a claim. For all of these reasons, you’ll want general liability insurance if you have a business in California.
How Much does General Liability Insurance Cost in California?
How much you’ll pay for liability insurance depends on what sort of business you’re in, as well as other factors. Contractors and construction businesses pay the most for general liability insurance because those fields have the most risk. The average cost of general liability insurance for small businesses in California about $780 a year, or $65 a year. It can range from $300 a year to $5,000 a year.
The average cost of general liability insurance for small businesses in California is about $780a year.
In order to get the cheapest general liability insurance policy for your business, you need to compare quotes from a few insurance companies. You can get quotes from these companies individually and compare them or you can work with a digital broker like CoverWallet or Simply Business who can provide you with several quotes from these companies in one place.
Learn more at how much general liability insurance costs in California
What Affects How Much I’ll pay for General Liability Insurance?
- type of business or industry
- size of business (annual revenue, number of locations, number of employees, number of customers)
- insurer
- claims history
- credit score
- location
- amount of coverage
Any business that involves doing work on someone else’s property also have the most risk of someone hurting themselves, or you could cause property damage, leading to higher rates.
Your industry:
General liability insurance provides businesses with protection against “slip and fall” claims. Some industries have a higher risk of this type of claims than others. For example, a retailer or cafe chain with several store fronts are more likely to have claims against “slip and fall” incidents than an IT business.
Higher risk industries will pay more for general liability insurance coverage. Construction and contracting businesses have the highest premiums for general liability insurance policies, following by cleaning and landscaping. On the other hand, photographer and IT businesses have the lowest premiums.
Size of the business:
Larger businesses typically require more insurance protection, which costs more. The more the storefronts your business has, the bigger the storefronts are, and the more customers you have, the more likely you’ll have claims. As a result, your general liability insurance policy is more expensive. As your business grow, the premiums for your general liability insurance will be likely to increase.
Insurer:
Different insurance companies calculate general liability policy premiums in different ways. And they may have different preferences (appetites) for covering certain types of businesses. This will impact the quotes insurers provide. It’s the reason you owe it to yourself, and your business, to get quotes from several insurance providers.
Claims history:
This is a simple insurance concept most people understand. If you’ve made a lot of claims on your general liability insurance, it’s a sign to an insurer that you’re more likely to file more claims in the future. If you’ve filed claims in the past, you can expect to pay higher premiums. The lesson: Not all incidents are preventable, but it’s still important to operate your business in as careful a way as possible to avoid unnecessary claims that could increase your insurance costs.
Credit score
The credit score of the business owner who is the policyholder can also impact the cost of general liability insurance. Credit scores are considered to be a measure of how reliable a policyholder will be in paying their insurance premiums in full and on time. They are also reflective of how responsible people are. If you have a low credit score, you will likely pay more for general liability insurance because you’re viewed as a bigger risk. The good news: A high credit score can save you money on coverage.
Location. Location. Location
Some cities and states are known for their high rates of lawsuits. If your business is located in one of them, you’ll pay more for general liability protection.
These aren’t all the factors that will influence your general liability premium, but they’re the ones that will have the biggest impact.
Amount of coverage
The more coverage you need for your general liability insurance policy, the more expensive the premiums will be. Typically, a general liability insurance policy has $1M coverage per occurrence and $3M coverage in aggregate. If you need higher coverage, you’ll pay higher premiums.
Decreasing deductibles will increase the premiums of the policy as well.
How to find cheap general liability insurance in California?
General liability insurance is necessary to protect your business. You should be able to get general liability coverage without breaking your bank. Here are some tips to help you find the coverage you need at a fair price:
Shop around for the best value.
Get quotes from a few companies or compare the multiple quotes generated by a service like CoverWallet or Commercialinsurance.net. This is the only way to make sure you don’t over-pay for your policy. Different insurance companies will always give you different quotes. Comparing several quotes to select the cheapest one for your business.
Don’t stop shopping around
Make sure you get new quotes before you renew your policy. Insurance companies change and update their underwriting policy often. When you renew your policy after 12 months, things have changed. Make sure you get and compare several quotes again before deciding to renew with your existing provider (only if their rates are still competitive).
Safety-first policy:
Make sure you implement safety standards and best practices in your business location and provide safety training to your employee regularly. Make use of safety programs offered by the insurance companies whenever available. This can help reduce the premiums of your policy.
Take advantage of discounts.
If they’re not offered to you when getting a quote, ask about them, whether you’re buying online or through an agent. Insurance companies always offer several discounts that you may be eligible for. Even if you are not eligible for now, knowing them existing will help you prepare to be eligible next time. Whenever possible, bundling other business insurance policies with the same provider will qualify you with good bundle discount.
Taking these steps will help ensure you’re not paying too much for your general liability coverage in California.
>>MORE: The Cheapest General Liability Insurance Companies
General liability insurance for contractors in California
Contractors in California aren’t technically required to carry general liability insurance: it’s “strongly encouraged.” Contractors are required to inform clients whether or not they have general liability insurance, and if you don’t have it, you will have a harder time bidding on jobs. You should also be aware that without general liability insurance, one lawsuit could bankrupt you and will almost certainly cause you financial hardship.
>>MORE: The Best General Liability Insurance for Contractors
>>MORE: The Cheapest General Liability Insurance for Contractors
General liability insurance for LLCs in California
Filing for an LLC for your business is a smart move. LLC means limited liability corporation. With this paperwork, your personal assets are protected should someone sue your business. Of course, your business assets are still vulnerable so getting a general liability policy is a good idea. You should also be aware that California does not have a cap on liability lawsuits. Someone could technically sue you for as much as they want. And if they win and you don’t have insurance protection, you have to pay with all of your business assets, which can bankrupt your business.
The costs of general liability insurance for an LLC are roughly the same as they are for other business structures. The average cost of general liability insurance in California is $2,220 a year, or about $185 a month.
>>MORE: The Best General Liability Insurance for LLCs
Small business insurance in California
Small business survival is fairly reasonable in California. Actually, Business Insider ranked California 27th out of the fifty states in a list of the best and worst states to start a business. The main drawback of starting a small business in California is its high costs. California ranks 2nd in the most expensive state for cost of living, only after Hawaii.
Business tax is also very high in California, ranking the 3rd worst in the country. Take extra steps to protect your small business. Small business insurance can increase the cost of running the business, but you will regret not having it when incidents happen. Below are some of the popular small business insurance coverages in California and here are our recommendations for the top small business insurance companies in California for your reference.
- Workers compensation insurance in California
- Commercial auto insurance in California
- Professional liability insurance in California
Workers compensation insurance in California:
Workers compensation insurance is required in California if you have employees, even just one. Even if you have one part-time employee, you are required legally to have workers comp insurance for that employee. Sole proprietors are not required to have workers comp insurance, unless you are a roofer. Workers comp insurance pays for medical costs, lost wages, disability benefits, death benefits, re-training costs, etc. if and when an employee gets injured or becomes ill at work. Learn more at the best workers comp insurance companies in California.
Commercial auto insurance in California:
Commercial auto insurance is required in California. If you use a vehicle for work, you need to have commercial auto insurance. Your personal auto insurance policy doesn’t cover your uses of vehicles for business. If your insurance finds out, you might not be able to have auto insurance coverage at all or you have to pay at a very high cost. Learn more the differences between commercial auto vs. personal auto insurance and why small businesses need commercial auto insurance and the best commercial auto insurance companies in California.
Professional liability insurance in California:
Professional liability insurance isn’t, in general, required in California, except malpractice insurance for doctors. However, your employers and/or your clients might require you to have it before they can employ you. Professional liability insurance covers lawsuits costs and fees and settlements related to mistakes or negligence you or your employees make while doing your work. If you and your business provide services or advice to your clients, it is likely that you need professional liability insurance coverage. It is often called malpractice insurance in healthcare and legal fields and errors and omissions (or E&O) in real estate, insurance, finance, and other consulting industries. Below are the most popular professionals that need this coverage:
- Lawyers – Top 5 Providers of Legal Malpractice Insurance & How Much It Costs
- Accountants & CPAs – Professional Liability Insurance (E&O) for Accountants and CPAs
- Tax preparers – The Best E&O Insurance for Tax Preparers
- Doctors – The 5 Best Providers of Medical Malpractice Insurance
- Consultants – Professional Liability Insurance (E&O) for Consultants
- Real estate agents – Top 5 Providers of Real Estate E&O Insurance & Costs
- Insurance agents – E&O Insurance for Insurance Agents: Cost and Top 5 Providers
- Engineers – Top 5 Providers of Professional Liability Insurance for Architects and Engineers
- Marketing and advertising services
- Psychologists – Top 4 Providers of Malpractice Insurance for Psychologists and Counselors
- Nurses – The Best 4 Providers of Nursing Malpractice Insurance
- Nurse practitioners: The Best Malpractice Insurance for Nurse Practitioners
- Dentists – Top 5 Providers of Dental Malpractice Insurance
- Dental hygienists – The Best Malpractice Insurance for Dental Hygienists
- Physician’s assistants – The Best Malpractice Insurance for Physician’s Assistants
- Physical Therapists – The 6 Best Malpractice Insurance Providers for Physical Therapists
- Chiropractors – 4 Best Choices for Cheap Chiropractic Malpractice Insurance
- Pharmacists – The Best Malpractice Insurance for Pharmacists and Costs
- Social workers – The Best Malpractice Insurance for Social Workers
Last Thoughts
Now that you’ve worked hard to get your business established in California, don’t neglect to get general liability insurance. One lawsuit could bankrupt a small business, and even if it doesn’t bankrupt you, it could take years to recover. Juries in California tend to be generous with settlements, so make sure you and your business is protected.
>>MORE: Top 5 Providers of Professional Liability Insurance in California
>>MORE: Top 6 Providers of Workers Compensation Insurance in California
>>MORE: The Best Commercial Auto Insurance Companies in California
